Comcast Lashes Out at Netflix Over TWC Deal

There's no love lost between the SVOD pioneer and No. 1 cable operator. Comcast now alleges extortion by Netflix and others seeking favors for their support of its pending acquisition of Time Warner Cable

Netflix and Comcast don't like each other. That reality continues to simmer as evidenced by Netflix CEO Reed Hastings' public outcries over interconnection deals with the cabler (and other ISPs) and vocal stance against the $45 billion Comcast/Time Warner Cable merger.

Comcast, which has refused to consider partnering with Netflix to offer the SVOD service directly to its subscribers, opting instead to operate its own SVOD service - Xfinity Streampix - and up content video distribution over a proprietary X1 platform, responded Sept. 23 in lengthy comments submitted to federal regulators overseeing the TWC deal.

The FCC has sought public input regarding the merger - an outreach Comcast rivals seized upon to accuse the cabler of creating artificial bottlenecks regarding both Internet and broadcast transmissions, among other charges.

'These claims are as unfounded today as they were when the [FCC] rightly and repeatedly rejected them in prior decades,' Comcast wrote.

Comcast claims complaints cited by opponents are 'more unfounded' now due to their self-serving nature. Specifically, the company said parties such as Netflix, Dish Networks, Discovery Channel, Cogent Communications and others are seeking free interconnection deals, participation in advertising 'interconnects,' sharing of advertising technology, and renewal of retransmission agreements before their expiration date, among other demands.

'The significance of this extortion lies in not just the sheer audacity of some of the demands, but also the fact that each of the entities making the 'ask' has all but conceded that if its individual business interests are met, then it has no concern whatsoever about the state of the industry, supposed market power going forward, or harm to consumers, competitors, or new entrants,' Comcast wrote.

The cabler said industry issues proffered by Netflix, such as open Internet policies, interconnection practices and other matters, are being addressed separately by the FCC.

'Netflix recycles prior claims about its interconnection agreement ... something that is plainly not [TWC] transaction-specific since it predates this proceeding by months, features in Netflix's nearly identical advocacy in the [FCC's] unrelated Open Internet proceeding, and mirrors Netflix's incessant complaints about its agreements with other ISPs,' Comcast wrote.

The cabler said Netflix allegations are merely self-serving, reiterating that the SVOD pioneer chose a more circuitous route for its video streams that resulted in slower speeds and occasional buffering to subscribers. Comcast said Netflix 'deliberately' sent its video streams across third-party channels that could not accommodate the traffic demands instead of paying for expedited service.

'What its comments and trumped-up economic theories here show is that Netflix will use any proceeding, in any context, to try and shift the costs for carrying its content onto the backs of others - a great business result for Netflix, but one that would increase prices to consumers and disserve the public interest,' the cabler wrote.